Traditional post office counters could be replaced by pop-ups and self-service kiosks under a shake-up of the loss-making retail network.

But widescale immediate post office branch closures have been ruled out in a report to Tynwald.

The Post Office board says the loss-making network of 22 retail outlets is not sustainable and it will be impossible to maintain it in its current size and form.

With losses climbing from the current £1.17m to a forecast £1.73m by 2023-24, action must be taken before it reaches a ’financial precipice’.

The report on modernising the Post Office retail network, to be brought to next week’s Tynwald, rules out as ’untenable’ the radical option of closing all but five post offices over a 12 month period.

It says such a move would have a significant impact on customers and potentially damage the Post Office brand.

Instead, the board recommends the phased development of a ’demand-driven network’. This would involve ’tailoring services and embracing technology’ to lower costs, while providing ’competitive postal service access points’.

The Post Office expects this to boost prospects of returning to profit by 2023/2024.

Under a series of guiding principles, the Post Office pledges to ensure 96% of island residents live within three miles of an access point for postal services.

This would mean there would be a minimum of 13 physical service access points.

New retail services could be provided where financially viable. The report suggests a move from traditional counter services to flexible pop-ups located in shops, libraries, local government offices and community hubs as well as self-service kiosks and parcel drop boxes.

In a separate report to Tynwald, the Post Office’s latest accounts report a loss of £662,000 this year compared to £1.2m the previous year.

Turnover decreased from £27.4m to £27.1m, and the mails division reported a 3% reduction in revenue, with an 8% cut in mail volumes.